Here's what to expect for the T-bill auction on 22 May

What happened?

The next 6-month Singapore T-bill auction (BS25110H) is coming up on 22 May 2025.

At the last auction, the cut-off yield for the 6-month Singapore T-bill further declined to 2.30%. The cut-off yield on the 1-year Singapore T-bill also fell to 2.29% recently. 

Despite the lower yields, demand for the Singapore T-bill has remained high. 

If you're wondering if it might be still worthwhile investing in the T-bill,  I will share some of the latest indicators to help us estimate what the next cut-off yield might look like.

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Here's what to expect for the Singapore T-bill auction on 22 May

#1 – US bond yields have increased compared to two weeks ago

The 10-year US government bond yield was at 4.54% as of 15 May 2025, a slight increase from two weeks ago. 

This marks a continuation of the upward trend seen since early April, reflecting growing investor expectations that the Federal Reserve may delay rate cuts due to persistent inflationary pressures. 

The move also follows recent geopolitical tensions and tariff announcements that have added to bond market volatility.

There appears to be more signs of stabilisation in the market, following the sharp sell-off in US government bonds after sweeping tariffs were announced by US President Donald Trump.

Yields on shorter-term US government bonds has also followed the 10 year bonds, with an increase compared to two weeks ago.

The 1-year US government bond yield was at 4.14% as of 15 May.

#2 – Singapore bond yields have rebounded

The 10-year Singapore government bond yield rose to 2.63% as of 15 May 2025, up from a recent low of 2.4% earlier in May.

Despite the bounce, yields remain well below the 2.90% levels seen in February, indicating that local expectations for rate cuts or slower growth may still be intact.

The closing yield on the 6-month T-bill was 2.30% on 14 May , it is the same as the cut-off yield of 2.30% in the previous T-bill auction on 7 May.

The yield on the 3-month MAS bill can also give an indication of the yields for shorter-maturity Singapore government bonds.

The cut-off yield was at 2.40% in the auction on 14 May, declining slightly from 2.45% in the auction on 29 April. 

#3 – Slightly higher issuance size compared to the previous auction

The issuance size of the upcoming 6-month Singapore T-bill is $7.5 billion, higher than the previous auction which was at $7.4 billion.

We saw a slight increase in the amount of T-bill applications, increasing to S$17.1 billion in the auction on 7 May, up from S$16.6  billion on 24 April.

If demand continues to rise, we may see downward pressure on the cut-off yield in the upcoming T-bill auction.

What would Beansprout do?

The closing yield on the 6-month Singapore T-bill was at 2.30% on 14 May, it is the same as the cut-off yield of 2.30% in the previous auction.

The closing yield on the 6-month Singapore T-bill yield is now slightly below the best 6-month fixed deposit rate of 2.35% 

However, bond yields globally remain highly volatile with uncertainty on the trade tariffs, and the cut-off yield in the T-bill auction will depend on the eventual demand for the T-bill.  

The closing yield on the 6-month Singapore T-bill would also be below the interest rates currently offered by the best savings accounts in Singapore. 

For example, many in the Beansprout community have been discussing the UOB Stash account, which offers an interest rate of up to 3.0% p.a. for $100,000 of deposits.

For CPF investors, the closing yield remains below the breakeven cut-off yield for CPF-OA funds. 

You can find out what is the breakeven yield on the Singapore T-bill for CPF applications using our CPF-T-bill calculator.

The 6-month Singapore auction will be held on 22 May (Thursday). We would need to put in our cash applications for the T-bills by 9 pm on 21 May (Wednesday).

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Applications for the T-bills using CPF-OA will close 1-2 business days before the auction date, and the dates differ across the three local banks.

• Applications for T-bills online using CPF OA via DBS close at 9pm on 21 May (Wed). Read our step-by-step guide to applying via DBS.
• Application for T-bills online using CPF OA via OCBC close at 9pm 21 May (Wed). Read our step-by-step guide to applying via OCBC
• Applications for T-bills online using CPF OA via UOB close at 9pm on 20 May (Tues). Read our step-by-step guide to applying via UOB. 

If you are new to investing in the T-bill, check out our comprehensive guide to Singapore T-bills to learn more.

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